“We know exactly who today’s dream killers are”: Why postal banking is so needed — and on the rise”
David Dayen, Salon, January 20, 2015
Lower-income Americans have been under-banked and abandoned. Now a progressive movement is fighting back (Updated)
Postal banking — allowing the post office to serve over 67 million Americans with little or no access to financial services, providing low-cost alternatives that would both promote financial inclusion and shore up the finances of the nation’s second-largest employer — has enjoyed a bit of institutional support, from Senator Elizabeth Warren to the Postal Service’s own Inspector General. But it hasn’t had the benefit of an activist movement pushing for it, until now.
Yesterday, fifteen consumer, progressive and labor groups inaugurated the Campaign for Postal Banking, demanding the creation of a “public option” for affordable financial services for unbanked and underbanked Americans. The campaign denounces the high cost of what they call “legal loan sharks” like payday lenders and check-cashing stores, and lauds the array of benefits for millions of people from fair access to simple banking services. And they plan to build public pressure on the Postal Service management to establish postal banking under their own authority, without having to go through Congress.
The founding members include leading consumer watchdogs like Public Citizen and Americans for Financial Reform, faith and progressive organizations like Interfaith Worker Justice and National People’s Action, the Alliance for Retired Americans and all four major postal unions.
“There’s a tremendous social need for folks that don’t have full access to banking services,” said Mark Dimondstein, president of the American Postal Workers Union (APWU)
, representing 200,000 letter carriers. “The post office is well-situated to address these social needs and bring new sources of revenue and help protect living-wage jobs.”
A companion report put out by coalition partner United for a Fair Economy, “Underbanked and Overcharged,” details the plight for those without stable banking access. Households using check cashers and payday lenders earn around $25,000 a year, and spend roughly $3,000 at these outlets — over 10 percent of their total income — on interest and fees. Consumers spend $103 billion a year on alternative financial services, according to the report, negatively affecting credit histories and wealth-building strategies.